NARRAGANSETT—Governor Lincoln Chafee met with local business owners and residents Wednesday morning to discuss his recently proposed budget. Chafee explained the state of Rhode Island’s economy at the Village Inn Restaurant in the Pier, detailing the motivation behind difficult budget cuts.
“We do have our challenges,” said Chafee. “The people want the delivery of quality services without their taxes going up. I am inheriting a $295 million deficit. Other states prepared better for it, we did not.”
“The cuts have already been made by the previous government,” he continued. “We’ve made deep cuts, $38 million in higher education and $195 million in cities and towns over the last 3 years. That is not smart in my view.”
Chafee detailed that $14 million is scheduled for state infrastructure in the upcoming fiscal year, part one of a five year plan. He also addressed the lowering of the state sales tax from seven to six percent in order to compete with neighboring states while reducing the amount of tax exempt items.
“What I wanted to do is change they way we’ve been doing things. We have more exempt items than all our neighbors,” said Chafee. “In this budget, we are broadening the sales tax and getting into more tax exempt items. As [Chairman of the Federal Reserve] Ben Bernanke said to me, that is a smart move.”
Many business owners present took umbrage with the reduction of particular food and clothing tax exempt items which have normally lessened the consumer burden during this economic downturn. Chafee expressed understanding for the resident’s concerns, but stressed the need for every town in Rhode Island to make sacrifices.
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